Vermont regulators to stop accepting new retail cannabis applications next month

The state panel that regulates Vermont’s cannabis industry voted Wednesday to temporarily stop accepting applications for new retail licenses, a move that comes amid growing concerns the market has become oversaturated in some cities and towns. 

The decision, which is set to take effect Oct. 25, marks the first time the Cannabis Control Board has shut off new retail applications since the first such businesses opened in October 2022. Board members said at a meeting Wednesday they plan to reopen applications in the future, though have not settled on a specific date.

“We need to take a step back and look at our market, and how we can improve it, from the inside out,” said one member of the state’s Cannabis Control Board.

The board also voted Wednesday to temporarily stop accepting applications for a certain type of cannabis cultivation license. These licenses dictate how much cannabis product someone is allowed to cultivate, and whether it can be indoors or outdoors, or both.

The new restrictions impact those looking to cultivate 2,500 square feet or less of plant cover. Regulators previously shut off new licensing for larger prospective cultivators. 

The board made no changes to the smallest tier of cultivation license, for those looking to cultivate 1,000 square feet of plant cover or less, either indoors or outdoors.

James Pepper, the Cannabis Control Board’s chair, said in an interview Thursday that the decision to pause retail licenses was a response to how the more than 80 existing retail locations in Vermont are in “a really unnatural distribution” around the state.

That’s largely because, under state law, recreational sales are only allowed in a city or town if that community votes to allow them. (About 30% of communities in the state have voted to do so, data shows.) The result, board members said Wednesday, is a situation like that in Burlington — where the city has more than a dozen active retailers, while neighboring South Burlington has none because that city doesn’t allow them. 

This year, the Legislature passed a law, Act 166, that requires the Cannabis Control Board to develop new rules improving the geographic distribution of cannabis retailers “based on population and market needs,” the legislation states.

But board members said they’re worried if they start to develop rules that, for instance, curtail new retail establishments in already crowded markets like Burlington, it could spur even more people to try to set up shop there before the rules are finalized.

The board decided to allow applications already in the pipeline to be approved for about three weeks after the Oct. 25 deadline lapses. According to Pepper, there are currently 21 prospective retailers at various stages of the application process statewide.

Several people attending the Wednesday meeting said they were among those in the process of obtaining a license, and so were concerned by the new deadline.

Mark Frier, who said he has already been preapproved for a license, told the board his cannabis business is “five days away from breaking ground — so, just concerned.” 

Olga Fitch, the board’s executive director, said during the meeting that she thought the reduced timeline was reasonable for many current applicants.

“As long as folks are aware what our timelines are, and are willing to work with the licensing team and have their ducks in a row, so to speak, we should be able to make good progress,” Fitch said.

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